MPs reverse welfare reform defeats

People who lose their job will be given a nine-month grace period, employment minister Chris Grayling said

MPs have asserted their authority over the House of Lords and reinstated coalition plans for a £26,000 cap on benefits.

The Commons overruled a series of Lords amendments to the Government's welfare reforms on employment and support allowance (ESA) and child maintenance charges.

It also removed the exemption for child benefit from the £26,000-a-year cap, although Employment Minister Chris Grayling offered concessions on the flagship policy.

Earlier at Prime Minister's Question Time, David Cameron challenged Labour to support the threshold - equivalent to a gross salary of £35,000 - saying: "The cap is right and the cap is fair."

The Welfare Reform Bill will now go back to the Lords, where the Government will cite "financial privilege", meaning peers cannot block the measures because they affect tax and spending decisions.

But, amid concerns from Lib Dem deputy leader Simon Hughes and Tory MP Mark Field, who said they are worried families in London might have to move out because of the changes, Mr Grayling announced a number of concessions on the cap.

He said families would receive a 12-month grace period to find work, while those who lose their job through no fault of their own after being employed for a year would be given nine months in which to find new employment.

Meanwhile, households entitled to working tax credit would be exempted from the cap along with working households on universal credit after 2013.

War widows and widowers would also be exempted while households receiving the support component of employment and support allowance (ESA) but not receiving disability living allowance would also not be penalised, he said.